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National Department of Public Works Immovable Asset Management

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Lack of a regulatory framework for immovable asset management ... Chain Framework and PPPFA, or gratis transfer to province or municipality or ... – PowerPoint PPT presentation

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Title: National Department of Public Works Immovable Asset Management


1
National Department of Public WorksImmovable
Asset Management
  • Portfolio Committee on Public Works
  • 31 August 2005

2
CONTENTS
  • The status quo
  • Improvement initiatives
  • GIAMA
  • Introduction of user charges
  • Asset register
  • Proactive disposal programme
  • Options analysis
  • Service level agreements
  • Feedback on specific properties

3
STATUS QUO
  • Lack of a regulatory framework for immovable
    asset management
  • Lack of incentives for departments to utilise
    immovable assets efficiently
  • Inadequate budgets for maintenance

4
STATUS QUO .cont
  • Quality of information on national asset register
    needs to be improved
  • Provincial immovable asset registers need to be
    improved
  • Planning weaknesses
  • Properties left vacant and deteriorating for
    years
  • Inadequate analysis before new acquisitions are
    made
  • Under-utilisation of existing assets

5
GIAMA
  • Provides a regulatory framework for national and
    provincial government for managing immovable
    assets
  • Introduces uniform, efficient, effective and
    accountable management of immovable assets
  • Each organ of State (users and custodians) will
    be required to produce an annual immovable asset
    management plan (AMP) that will form part of the
    annual strategic planning and budgeting process
    of Government

6
  • AMPs will cover
  • Description of assets required based on service
    delivery strategies
  • Plans for new acquisitions
  • Consideration of non-asset solutions
  • Consideration of use of existing assets rather
    than acquiring new assets
  • Description of the condition of existing assets
  • Plans for maintaining assets
  • Plans for disposing of assets no longer required
    for service delivery
  • Production of AMPs should result in improved
    planning for, and management of, immovable assets

7
  • Due to (a) complexity of legislation governing
    Local Government and (b) varying levels of
    autonomy of Public Entities, Draft legislation
    currently under consideration will be applicable
    to National and Provincial Government only.
  • Following approval by Cabinet during August 2005,
    draft Bill has now been submitted to State Law
    Advisor for certification
  • Bill to be submitted to Parliament during
    September 2005

12
8
INTRODUCTION OF USER CHARGES
  • White Paper on Public Works stated that budgets
    related to immovable assets would be devolved and
    user charges introduced
  • Proposals for devolution of budgets and
    introduction of user charges from 1 April 2006
    have been drawn up, currently awaiting final
    Treasury approval
  • Responsibility for paying municipal property
    rates for provincial properties being devolved to
    provinces from 1 April 2006

9
  • User charges
  • Involves the devolution of budgets to
    departments, but functions will generally remain
    with DPW
  • Departments will pay a rental per square metre to
    DPW for state-owned assets which they occupy
  • DPW will use the rental revenue to pay property
    rates and for maintenance (DPW becomes a landlord
    for state-owned assets)
  • Will result in transparency of budgets (all costs
    associated with a service on that departments
    budget)
  • Will create incentives for departments to utilise
    their assets more efficiently
  • Proposed that function of paying municipal
    service charges (water and electricity) be
    devolved, as this does not require scarce
    expertise
  • Proposals include devolution of both budget and
    function to SAPS for functional assets, subject
    to SAPS meeting certain conditions

10
ASSET REGISTER
  • DPW has immovable asset register in place for
    national government accommodation-related
    immovable assets
  • Provinces are accountable for asset registers for
    provincial assets
  • No matters of emphasis on national immovable
    asset register in 2004-2005 audit report
  • DPW has agreed with Accountant General on minimum
    information contents of an acceptable immovable
    asset register
  • Currently implementing three-year plan to verify
    existing minimum information and collect missing
    minimum information for all assets on the
    national register

11
PROACTIVE DISPOSAL PROGRAMME
  • Implementing plan to proactively identify and
    dispose of immovable assets no longer required
    for service delivery
  • Disposal processes
  • Identify possibly redundant assets (regional
    offices, head office, departments, public)
  • Carefully check utilisation and analyse potential
    for reallocation for other service delivery
    purposes, including land reform
  • Provincial State Land Disposal Committee
  • Consent of Minister of Land Affairs
  • Approval by Minister of Public Works
  • Valuation
  • Disposal through open tender, in terms of Supply
    Chain Framework and PPPFA, or gratis transfer to
    province or municipality or other body for land
    reform purposes

12
  • Progress to date
  • Ministerial approvals obtained for initial group
    of 177 properties, which are now in stage 7 and
    are planned to be disposed of by end March 2006
  • First group largely consists of residential
    stands
  • Submissions for ministerial approvals currently
    being prepared for second group of 114 properties
    (i.e. in stage 5), including 24 foreign
    properties identified by the Department of
    Foreign Affairs for disposal and including
    several large local properties
  • Third group of 2000 properties currently in stage
    2
  • Estimated revenue from first group of properties
    R12 m second group R350 m
  • Department is continuing to endeavour to identify
    and analyse other possibly redundant and
    underutilised properties for disposal /
    reallocation

13
OPTIONS ANALYSIS
  • No systematic and objective methodology for
    determining optimal acquisition solution, and
    optimal method of procurement (eg lease, PPP,
    purchase)
  • DPW and National Treasury recently jointly
    developed a generic options analysis methodology
  • Options analysis will be carried out for all
    large acquisitions in future

14
SERVICE LEVEL AGREEMENTS (SLA)
  • Generic SLA developed in 2004
  • To date, only one client department has signed
    the SLA
  • SLA currently being revised to reflect GIAMA and
    introduction of user charges
  • DPW will seek Treasury approval of revised SLA
    and Treasury Regulation requiring departments to
    sign the revised SLA with DPW

15
FEEDBACK ON SPECIFIC PROPERTIES
  • Jozini Military Base
  • SANDF closed down the Jozini military base in
    2003
  • The base was handed over to SAPS to establish a
    police station
  • SAPS handed over some of the properties to DPW in
    2004
  • Some of the residential properties handed over to
    DPW were illegally occupied
  • The municipality has indicated interest in taking
    over the illegally occupied properties, and
    discussions are under way in this regard
  • The municipality has also indicated interest in
    taking over other parts of the base, including
    the sports facilities
  • The possible transfer of the properties to the
    municipality is complicated by a land claim which
    has been lodged
  • DPW regional office is in discussion with the
    provincial Land Claims Commissioner to try to
    resolve this issue
  • In the meantime, DPW regional office is
    negotiating with the illegal occupants for them
    to enter into lease agreements

16
  • Port St John Military Base
  • SANDF largely stopped using the base before 1997,
    apart from a single commando unit, which will be
    vacating the base by end August 2005
  • DWAF is occupying a small portion of the property
  • A school is leasing part of the property from DPW
  • Most of the residential properties and some of
    the offices are illegally occupied
  • There is a land claim on the property which has
    recently been resolved in favour of the community
  • The Land Claims Commissioner is currently having
    the property valued and then it will be
    transferred to the community
  • The Municipality has built 500 houses for the
    illegal occupants to be moved to, and this is
    planned once electricity has been installed at
    the houses
  • The community is planning to develop the property
    together with the municipality once the transfer
    takes place
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